The UFB program was a gift to the incumbent Telecom NZ. Their design was expensive and overwrought as you’d expect from a legacy telco. While it is nice that NZ has semi-decent fiber it’s still worse than my experience of FTTH overseas.

Note that there is nothing inherent about muni fiber that prevents it providing the same unbundled layer 2 and dark fiber services. But in your example of Chorus they backhaul customers over layer 2 to your location for you. That’s how your example of one guy with a router works. He puts it in Auckland and everything is backhauled hundreds of miles to it. Munis do not operate backhaul networks, these aren’t state wide networks where a guy with his router can drop it in one pop in the biggest city and serve customers from across the state. This kind of design also becomes incredibly inefficient. The provider Chorus here is really doing most of the heavy lifting and doing it in the least efficient way possible. (Back hauling layer two to POPs hundreds of miles away.)

Today all services live at layer 3 and are provided over the top. There’s a good case for just simplifying this and munis just providing the layer 3.